Bramble v. Thomas

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David A. Bramble, Inc. v. Merrill F. Thomas, et ux., No. 32, Sept. Term, 2006. REAL PROPERTY - RIGHT OF FIRST REFUSAL - TRIGGERING OFFER - GOOD FAITH - MATCHING OFFER. Petitioner, David A. Bramble, Inc. ("Bramble"), a Maryland corporation engaged in the business of mining gravel and s and, is the holder of a right of first refusal in a particular parcel of land located in Caroline County ("the Property"). The landowners, John O. Lane and Rose T. Lan e ("Lanes"), received from Respondents, Merrill F. Thomas and Nancy R. Thomas ("Thomases"), an offer to purchase the Pro perty. Added by hand-written addendum to the offer was a "no mining" clause which purported to forbid mining o n the Prop erty. When Bramble attempted to exercise its right of first refusal, it omitted from its "matching" offer this prohibition on mining. After the landowners refused to convey to either the Thomases or Bramble, the Thomases filed suit in the Circuit Court for Caroline County seeking, inter alia, specific performance of their offer to purchase the Property. Both the Lanes and Bramb le moved for sum mary judgment. The C ircuit Court declared that although Bramble's preemptive right did not violate the rule against perpetuities, Bramble's purported exercise of the right of first refusal was ineffectual because the exercise was not made "on the terms of the intended sale," to wit, the omission from its exercise of the "no mining" provision. T he Cou rt of Specia l Appeals affirmed the grant of summa ry judgment. A right of first refusal, or "preemptive right," is a type of option, and subject to many of the same rules as an option agreement. Maryland law recognizes generally that the exercise of an option mu st be in exact accord with its terms. Maryland law is ambiguous, however, as to whether the exercise of a right of first refusal must match exactly the terms of a triggering offer, or whether it must match only those term s material to the offer. Other jurisdictions are likewise split on the issue. We need not decide the issue here, however, because there was a genuine dispute of material fact sufficient to defeat summary judgment, i.e., whether the "no mining" provision was added in bad faith in o rder to f rustrate P etitioner 's preem ptive rig ht in the P roperty. A property owner, for the purpose of discouraging the holder of a preemptive right in the property from exercising its right of first refusal, may not insert into the triggering offer terms which it kn ows w ill be repugna nt to the hold er. This app roach pro tects the equ itable property interest a holder of a preemptive right has in the property, allows a property owner to otherwise dispose of the property as he, she, or it deems a ppropriate, a nd comp orts with general notions of good faith and fair dealing followed generally in Maryland contract law. In the present case, summary judgment was an im proper m eans of d etermining the rights of the parties. Wh ile the "no m ining" claus e could have been inserted into the triggering offer for some legitimate reason, there is evidence on the record, if believed, that the Lanes and/or Thomases inserted the provision as a "poison pill" in order to discourage Bramble from exercising its right. Bramble had been mining, for sand and gravel, land adjacent to the property for years. Ms. Thomas was a registered real estate agent, and likely knew the activities of the property owners in the vicinity of the property. Lastly, the hand-written addendum by which the clause w as added supports a c onclusion that the "no mining" provision was an a fter-the-fact m ethod of d issuading e xercise of B ramble's pree mptive righ t. Summary judgm ent in favor of Re spondents, therefore, w as improper. Circuit Co urt for Caro line County Case # 05-C-04-009233 IN THE COURT OF APPEALS OF MARYLAND No. 32 September Term, 2006 DAVID A. BRAMBLE, INC. v. MER RILL F. TH OM AS, et ux. Bell, C.J. Raker Wilner Cathell Harrell Battaglia Greene, JJ. Opinion by Harrell, J. Filed: January 8, 2007 The sole issue in this case concerns the propriety of th e Co urt of Sp ecia l Appeal s's affirmance of summary judgment in favor of third-party purchasers of certain real property and against the holder of a preemptive right of first refusal as to the property. David A. Bramble, Inc. ("Petitioner" or "Bramble"), the holder of the right of first refusal, attempted to exercise its pre emptive rig ht, but omitted in the purported exercise a n on-price term contained in the third-parties' trigge ring offer. T he Circuit C ourt for C aroline Co unty, in granting summary judgment to the third parties, declared that Bramble had not exercised effectively its right of first refusal. The Court of Special Appeals affirmed. For reasons we shall explain, we conclude that there was generated a genuine dispute as to a material fact whether the non-p rice term w as added to the triggering offer in bad faith. Therefore, we shall reverse. I. FACTUAL BACKGROUND With the notable exception identified supra, the facts, material and otherw ise, of this case were otherwise largely undisputed. John O. Lane and Rose T . Lane ("Lanes"), husband and wife, own a 25.99 acre parcel of unimproved real property located on Cherry Lane near Ridgely in Caroline County, Maryland (the "Property"). On 3 January 2004, Respon dents here, Merrill F. Thoma s and Nancy R. T homas ("Tho mases"), entered into an Unimproved Land Contract of Sale ("Thomas Offer") whereby the Lanes agreed to sell to the Thomases the Property for a purchase price of $105,000.00. Respondents tendered with the contract a $1,000.00 earnest money deposit. Closing was to occur on or before 16 Febru ary 2004. The Thomas Offer contained a hand-written Addendum which provided the following: 1. Nancy Thomas is a licensed Real Estate Agent in the State of Maryland. 2. This contract is contingent upon the release of Dav id Bramble's first right of refusal within 30 days of ratification. 3. Buyers agree that they will not mine the above referenced prop erty. The "right of first refusal" to which Paragraph 2 of the Addendum referred was originally granted by the Lanes to R WL De velopment Co mpany ("RW L") on 20 Feb ruary 1992,1 and prov ided, in pertine nt part: In the event Jo hn Ow ens Lane and Ro se T. Lan e, his wife, shall receive an offer to pu rchase their p roperty located in the Second Election D istrict of Caroline County, Maryland, described in a dee d from RWL Deve lopme nt Com pany, a Maryland Corporation, to John Owens Lane and R ose T. Lane, his wife, dated November 20, 1991, recorded in Liber 24 7, Folio 375, a Land Record Book for Caroline County, Maryland, and decide to accept the same, they shall first offer the p roperty to RWL Developm ent Compan y, its successors and/or assigns, for the price an d on the term s of the intend ed sale. RWL Development Company, its successors and/or assigns, shall have th irty (30) days from the date of such off er in which to accept or reject the same. Nothing hereinbef ore contained shall in any way delay or limit the right of any mortgagee to foreclose under a valid mortgage or deed of tru st, in accordance with the terms of such instrument, or to accept a deed in lieu of foreclosure from the grantors.[2] 1 The Right of First Refusal was recorded among the Land Records of Carolin e Coun ty in Liber No. 249, Folio 397. 2 According to a letter in this record, written by counsel for the Lanes and dated 6 (contin ued...) 2 (emphas is added). On 7 May 1993, RWL Development Company c onveyed by Deed3 to Petitioner4 its right of first ref usal. Counsel for the La nes wrote a letter to Bram ble on 6 Ja nuary 2004 notifying it that the Lanes had acc epted the Thom as Offer, contingen t upon B ramble's relea se of its right of first refu sal. A ttach ed to the le tter w as a c opy of the Thomas Offer, with the "no mining" clause. Bramble executed and delivered to the Lanes on 19 January 2004 an "Agreement of Sale," which purported to exercise its right of first refusal ("Bramble Of fer").5 Petitioner's 2 (...continued) Janu ary 20 04, P etitio ner o wns RW L Devel opm ent C omp any. 3 This Deed was recorded on 11 May 1993 among the Land Records of Caroline County, Maryland, at Liber 252, Folio 712. 4 David A. Bramble, Inc., is a corporation organized under the laws of the State of Maryland with its principal place of business in Caroline C ounty. Petitioner mines sand and grav el fro m a site lo cated adjacent to the P rope rty. RWL conveyed to Bramble the right of first refusal as part of a larger land sale, whereby Bramble received, in exchange for $445,000.00 and other valuable consideration, three parcels of la nd located on or arou nd Che rry Lane in R idgely, Maryland . One parc el is adjacent to the Pro perty, and the other two are located across Cherry Lane from the P rope rty. According to the land sale contract, dated 8 March 1993, there is a sand pit located on one of the tracts. This is the land from w hich Petitioner mines sand and gravel. It is unclear from the record whethe r Petitioner extracted natural resources from the pit before 7 May 1993. In any event, Bramble had been mining the pit since that date. 5 A clause inserted by Bramble into the Agreement read: WHEREAS, an off er, to purchase the land described in the aforesaid right of first refusal has been accepted by John Owens Lane and Rose T . Lane, on [3 Janu ary 2004]. It is the intent of this Agreem ent being su bmitted by D avid A. B ramble, Inc ., to (contin ued...) 3 offer matched all the terms of the Thomas Offer, except that it omitted the prohibition against mining include d in Par agraph 3 of the Thom as Off er's Add endum . Respon dents agreed on 4 February 2004 to amend certain terms in the Thom as Offer, increasing the pur chase p rice to $1 20,000 .00, with settlement to occur on 31 March 2004. The followin g day, counsel for Respondents faxed to the Lanes a revised offer ("Second Thomas Offer"), which reflected the amended price and set tlemen t terms. By letter dated 6 February 2004, the Lanes' attorney informed Petitioner of the new offer and requested advice as to whether Bramble would be willing to meet the increased sale price of $120,000.00. On 17 February 2004, counsel for Petitioner responded that, because B ramble previously had exercised its preemptive right, a binding land sale contract had been formed. According to counsel, "the Thomases [were] not at liberty to make additional offers nor [were] the Lane s at liberty to ac cept them " in connectio n with the sale of t he Prope rty. The next day, counsel f or the Lan es advised Bramble that it was the Lanes' view that the offer tendered by Petitioner was not an effective exercise of its right of first re fusa l. Specif ically, counsel informed Bramble that if it wishe d to exercise its preemptiv e right, "[it] must do so by accepting all the terms of the offer, including the restriction that the property would not be mined." B ecause the Bramble Offer, as signed and delivered, did not mirror exactly the 5 (...continued) exercise the right of first refusal, to purchase the property for the price set forth in the order heretofore accepted by John Owens Lane and Rose. T Lane, his wife. 4 terms of the Thomas Offer ratified by Respondents, it was neither an effective exercise of the right of first refusal, nor a valid acceptance. According to the Lanes, the Bramble Offer was in stead a c ounter -offer which the Lan es wer e free to accep t or rejec t. Bramble agreed to revise his offer to include a prohibition against mining, and submitted a new offer ("Se cond B ramble O ffer") wh ich purpo rted to be a valid exercise of its preemptive right. Although the Second Bramble Offer included the "no mining" provision, it contained the original sales price o f $105,000.00. In other words, the Second Bramble Offer mirrored the provisions of the initial triggering Thomas Offer. The Second Bramble Offer was tendered on 19 February 2004, f orty-four days after Bramble was first notified of the Lane s' acceptance of the Th omas Offe r. Citing the controvers y concerning the validity of B ramble's exe rcise of its right of first refusal, and because of the fear of being sued by Bramble, the Lanes refused to convey the property to either suitor. Mr. Lane, on 7 March 2004, attempted instead to return the $1,000.00 earnest money ten dered by the T homase s with the T homas O ffer. Resp ondents answered by filing suit aga inst both the L anes and Petitioner in the Circuit Court for Caroline County in order to determine and enfo rce their asse rted rights wi th respec t to th e Pro perty. Respon dents sought in Count I a declaratory judgment that the right of first refusal was void because it violated the Ru le again st Perpe tuities. Specifically, Respondents argued, under Ferrero Construction Co. v. Dennis Rourke Corp., 311 Md. 560, 575-76, 536 A.2d 1137, 1144-45 (1988), that because Bramble was a corporation with a theoretically perpetual 5 existence, the right of first refusal might vest well beyond some life in being plus twenty one years. In Count II, Respondents sought specific performance of the Second Thomas O ffer. The Thomases requested further, in Count III, damage s in the amount of $25,000.00, for the antic ipato ry breach t hat o ccur red w hen the L anes refu sed to convey the p rope rty. The Lanes moved for summary judgment. Respondents answered and filed their own motion for summ ary judgmen t. Neither the L anes nor P etitioner filed a response to Respondents' motion fo r summa ry judgment. The parties appeared for oral argument on the motions, rep resented by co unsel. The Circuit Court filed its written opinion on the motions on 23 February 2005. The trial judge declared first that the right of first refusal did not violate the rule against perpetuities: The right of first refusal gran ted to Dav id A. Bram ble does not violate the Rule Against Perpetuities. In the original conveyance of the right to RWL Corporation, the Right was stated to be applicable "[i]n the event John Owens and Rose T. Lane, his wife, sh all receive an offer to pu rchase their proper ty." The right thus w ould vest, if a t all, within a life or lives in being, i.e., when the last o f the tw o Lan es die. Cf. Park Station Ltd. Partnership LLLP v. Bosse, 378 Md. 122 , 135 (2003). 6 6 As stated earlier, Respondents initially argued that the right o f first refusal w as void under Ferrero Construction Co. v. Dennis Rourke Corp., 311 Md. 560, 536 A.2d 1137 (1988). In Ferrero Constr. Co., this Court held that the "preemptioner" (the holder of a right of first refusal) holds an equitable interest in the subject property which vests only when the property owner decides to sell. We concluded that a right of first refusal conveyed between two corporations violated the rule against perpetuities. Because both corporations had theoretically an infinite existence, we reasoned that the holder's "right of first refusal was not (contin ued...) 6 The trial court continued, however, that the purported exercise of the right of first refusal was ineffectua l: Although it does not violate the Rule Against Perpetuities, Bramble's right of first refusal is void for the following reasons. Bramble had the option to accept the terms of any other off er to buy the pro perty and there by purchase it himself within thirty days of the offer of another. When Bramble learned of a contract between the Lanes and the Thomases, he submitted a proposed contract to the Lanes that had different terms than the contract between the Thomases and Lanes. Specifically, the contract between the Lanes and Thomases stated that the "[b]uyers agree that they will not mine the above referenced property." Bramble's first proposed 6 (...continued) limited to a term of years but was of unlimited duration." Thus, the right could vest beyond "a life in being plus twenty-one years," as contemplated by the Rule Against Perpetuities. Ferrero Constr. Co., 311 Md. at 575-76 n.7, 536 A.2d at 1144 n.7 (holding that corporations may not be used as m easuring lives for the purpo ses of the Rule A gainst Perpetuities). In Park Station Ltd. Partnership, LLLP v. Bosse, 378 Md. 122, 835 A.2d 64 6 (2003), however, this Court was called upon to decide whether a right of first refusal violated the Rule when conveyed by an individual property own er to a limited p artnership (w ith potentially unlimited duration). We held that becaus e the right of first refusal, as drafted, d id not continu e in the prop erty owner's successors or assigns, this right could not vest beyond the deaths of the pro perty ow ners. Park Station, 378 Md. at 135-36, 835 A.2d at 654. The property owner, in other words, would receive, if at all, an offer to purchase the encumbered property on or before their death, thereby vesting in the pree mptioner th e opportu nity to exercise its right of first refusal within the statutory period. In the present case, the Circuit Court determined that the right of first refusal granted by the Lanes, as drafted, pertained only to offers received by the Lanes themselve s, and did not contemplate offers received by the Lanes' heir or assigns. Thus, the right of first refusal would vest on or before the death of the Lanes , a life in being a t the t ime o f the right's creation. Respondents do not chal leng e her e, by c ross-app eal, the C ircuit Co urt's conclusion that the preem ptive right does not violate the Rule Against Perpetuities. Thus, we do not consider this issue. 7 contract to the Lanes lac ked this provision. A n acceptan ce with terms that vary from those in an offer constitutes a rejection and counte r-offe r. Post v. Gilles pie, 219 Md. 378 (1959). The court, thus, gra nted sum mary judgm ent on Re sponden ts' Count I claim . It denied summary judgment as to Counts II and III of the complaints, however, because there were "disputes as to material facts." The Circuit Court denied the Lanes' mo tion for summary judgmen t. On 24 March 2005, the Lanes an d Respo ndents reac hed a settlem ent agreem ent as to all unresolve d claims in th e action. Respondents filed on 25 April 2005 a motion for voluntary dismissal as to Cou nts II and III, pursuant to Maryland Rule 2-506(b), which the Circuit Court granted with prejudice two days later. Bramble noted a timely appeal to the Court o f Spec ial App eals. Bramble argued exclusively on appeal that the Circuit Court erred in declaring that the corporation had not exercised effectively its right of first refusal w hen it failed to include the "no mining" clause in the Bramble Offer. The Court of Special Appeals, in an unreported opinion, affirmed the judgm ent of the Circuit Cou rt. The intermediate appellate cou rt reasoned that, because the "no mining" provision w as a material term in the triggering of fer, Petitioner's "matching" offer, which omitted the use restriction, was an ineffective exercise of the corporation's right of first refus al. Even in the absence of language indicating that the Bramble Offer was a conditional exercise of Petitioner's right of refusal, according to the court, the absence of the "no mining" clause rendered Bramble's alleged exercise insufficient 8 because Bramble, in effect, was attempting to purchase, at the same price, more rights in the property than contained in the triggering offer. On Bramble's petition, we issued a writ of certiorari. 393 Md. 244 , 900 A.2d 751 (2006). 7 II. STANDARD OF REVIEW Summary judgment is proper when "the motion [for summary judgment] and response show that there is no genuine d ispute as to any material fact and that the party in whose favor judgment is entered is entitled to judg ment as a m atter of law . Md. R ule 2-501(f). Because a trial court decides only questions of law when considering a motion for summary judgment under Rule 2-501(f), this Court reviews a grant of sum mary judgm ent de novo in order to determine whether the trial court was lega lly correct . Walk v. Hartford Cas., 382 Md. 1, 14, 852 A.2d 98, 105 (2 004); Todd v. Mass Transit Admin., 373 Md. 149, 154, 816 A.2d 930, 933 (2003); Sadler v. Dimensions Healthcare Corp., 378 Md. 509, 533, 836 A.2d 655, 699 (2003); Southland Corp. v. Griffith, 332 Md. 704, 712, 633 A.2d 84, 87-88 (1993). In doing so, we review independently the factual record in a light most favorable to the non-moving party and construe in favor of the non-moving party any reasonable inferences which may 7 The que stion presen ted in Bram ble's petition w as: When the holder of a right of first re fusal on re al property attempted to exercise its right to purchase but omitted a nonprice term contained in the triggering offer, should the Court of Special Appeals have affirmed a summary judgment, that as a matter of law the attempted exercise failed when there was no evidence that the omitted term was material to the sellers? 9 be drawn from the pleadin gs, adm issions, a nd aff idavits. Jurgensen v. New Phoenix Atl. Condo. Council of Unit Owners, 380 M d. 106, 1 14, 843 A.2d 8 65, 869 (2004 ). III. DISCUSSION Respon dents main tain 8 that [t]he trial court properly determined that the failure of B ramble to submit a timely offer that included a prohibition against mining constituted a counter offer. A reply to an offer that differs from the suggested method of performance is a conditional acceptance or count er offe r. Baltimore County v. Archway Motors, 35 Md. App. 158, 163, 370 A.2d 469 (1977). Bramble's deviation from the terms of the Thomas Offer was not an unqualified acceptance of this offer "for the price and on the terms of the intended sale." As such, it did not comply and the trial court wa s correct in de termining th at it had not pr operly exercised its right of first refusal in a timely mann er. Respon dents argue furth er that, because the prohibition against mining was a material term of the Thomas Offer, its exclusion from the B ramble Offer improperly would have entitled Bramble to more rights in the subject prop erty than granted by the triggering of fer. 9 Petitioner counters that even if Maryland law requires exact matching of the terms of the triggering offer when e xercising a right of first refusa l, neither the property owner nor the proposed third-party purchaser may act in bad faith to discourage or frustrate the exercise of 8 Respondents made the same argument in the Court of Spec ial Appeals. 9 The basis for this argument is that the Prope rty would be more profitable, and thus more valuable, if mining of the land were permitted. Because the triggering offer contained a use restriction prohibiting mining on the Property, and Petitioner attempted to eliminate the use restriction wh ile maintaining the same purchase price fou nd in the triggering offer, it was receiving, in effect, at the same price significantly more valuable property rights. 10 the preemptiv e right, or include te rms whic h they know the preem ptive rightho lder will not accept. A. Options to Purchase and Rights of First Refusal Generally. In order to consider properly whether Petitioner's omission of the no-mining clause rendered ineffective the exercise of its pre emptive right, it is necessary first to refresh our recollection of the conceptual underpinnings of option contracts and rights of first refusal. An option is a "continuing offer to sell during the duration [of the option agreement] which on being exercised by the optionee becomes a binding and enforceable contract." Straley v. Osborne, 262 Md. 514, 521, 278 A.2d 64, 68 (1971) (quoting Diggs v. Siomporas, 248 Md. 677, 681, 237 A.2 d 725, 72 7 (1968)). It is w ell settled-law in Maryland th at to be an effective exercise of an option, th e exercise o f that option "must be u nequivoc al and in accordance with the terms of the option." Katz v. Pratt Street Realty Co., 257 Md. 103, 118, 262 A.2d 540, 547 (1970) (citing Simpers v. Clark, 239 Md. 39 5, 401, 211 A.2d 753 (1965)); Foard v. Snider, 205 Md. 435, 446, 109 A.2d 101, 105-06 (1954) ("Whatever the option requires must be done. As in the case of all offers, revocable or irrevocable, the exercise must be unconditional and in exact accord with the term s of the op tion.") (emph asis added); 1 W ILLISTON ON C ONTRACTS § 5:18 (4th ed. 1990) ("When the optionee decides to exercise [its] option, [it] must act unconditionally and according to the terms of the option."); see also Post v. Gillespie, 219 Md. 378, 385-86, 149 A.2d 391, 395-96 (1959). Indeed, Maryland applies generally this objective rule of offer and acceptance to the formation of any contract 11 underlying the alienation of real prop erty. See Peo ples Drug Stores, Inc. v. F enton Re alty Corp., 191 Md. 489, 494, 62 A.2d 273, 276 (1948) ("T o constitute a valid contra ct, the offer of one party must be certain and definite, and the acceptance of the other party must correspond with the offer in its entirety. A contract, to be final, must extend to all the terms which the parties intend to introduce, and m aterial terms cannot be left for fu ture settlement."). A right of first refusal, or "preemptive right," is a type of optio n, Ferrero Construction Co., 311 M d. at 567,53 6 A.2d a t 1140. Th e purpose s for whic h rights of first refusal are utilized are "closely related to the purposes of [traditional] option contracts." 3 CORBIN ON C ONTRACTS § 11.3 (rev. ed. 1996). The two types of agreements are d issimilar, however, in terms of the legal relationships of the p arties w ho ente r them. Id. A right of first refusal is an agreement between the property owner ("grantor") and a holder ("preemptioner") whereby the receipt of an offer f rom a third-party purchaser to buy the subjec t property "triggers" the right of first refusal w hich, in turn, "rip ens" into an option to buy on part of the preemptioner. Id.; see also Straley, 262 Md. at 521-22, 278 A.2d at 68-69 (referring to a preemptive right as a "conditional option, or first privilege of purchase "); Westpark, Inc. v. Seaton Land Co., 225 M d. 433, 449 -50, 171 A .2d 736 (1 961); Iglehart v. Jenifer, 35 Md. App. 450, 451 n.1, 371 A.2d 453 (1976) (differentiating between the legal effect of a tradition al option and an option of first re fusal). In sum, [preemptive] rights of the [holder] are contingent upon the desire of the ow ner to sell. [Unlike a true option] the [holder of 12 a right of first refusal] has no unqualifie d powe r to compe l a sale to him or to a third p erson . . . . These provisions are, consequently, analogo us to option s upon a c ondition pr ecedent, and subject to many of the same rules [as an option agreemen t]. R ESTATEMENT OF P ROPERTY § 413, cmt. b (1944) (emphasis added) (internal crossreferences omitted); see Straley, 262 Md. at 521-22, 278 A.2d 64 at 68-69. Thus, despite the differences in the legal effects of the two types of agreements, the rules relating to options are applicab le, for the mo st part, to rights of first refusal. B. Materiality of an Omitted Provision. Respon dents ask this Court to apply the objective theory of contracts followed generally in Maryland, i.e., tha t in order to ex ercise effe ctively the right of first refusal, Bramble's exercise must have been unequivocal and in accordance with the exact terms of the triggerin g offe r. Katz, 257 Md. at 118, 26 2 A.2d a t 547; Foard, 205 Md. at 446, 109 A.2d at 105-06. There is some social and legal utility in applying, to the purported exercise of a pre-emptive right, the requirement that the rightholder duplicate exactly the terms of the triggering offer because it tends to avoid a situation where the preemptioner otherwise may impede the alien ability of re al prop erty. As the U.S. Court of Appea ls for the Se venth Circ uit stated, the holder of a preemptive right should not be enabled to justify its failure to match a term in the third-party's triggering offer on the groun d that the om itted non-pric e term is immaterial: [w]ithout [an exac t matching requirement], the right [of first refusal] is an imped iment to the m arketability of p rope rty, because it gives the ho lder of the rig ht a practical p ower to 13 impede a sale to a third party by refusing to match the third party's offer exactly and then arguing that the discrepancy was immaterial. Miller v. LeSea Broad. Corp., 87 F.3d 224, 226 (7th Cir. 1996). Other courts likewise have extended to the exercise of a preemptive right the mirror image rule employed in determining whether an optio n was exercis ed eff ectively. West Texas Transmission, L.P., v. Enron Corp., 907 F.2d 1554, 1565 (5th Cir. 1990) ("Wheth er or not a particular contract term is material is not the standard by which w e judge whether an acceptance which rejects that term is a valid exercise of the right of first refusal. Like the acceptance of any other offer, the exercise of an option, must be 'unqualified, absolute, unconditional, unequivocal, unambiguous, positive, without reservation and according to th e terms or conditions of the option.") (citations omitted); 10 Weber Meadow-View Corp. v. Wilde, 575 P.2d 1053, 1055 (Utah 1978) (implying that when term s are added in good faith to a triggering offer, and not with the ulterior purpose of defeating a right of first refusal in the property, the terms of the triggering offer must be m atched exactly). 11 10 The U.S. Court of Appeals for the Fifth Circuit held further in West Texas Transmission, L.P., v. Enron Corp., that "a purported acceptanc e which le aves the pro perty owner 'as well off' as a third party offer, but which modifies, adds to or otherwise qualifies the terms o f the of fer, gen erally con stitutes a r ejection of the o ption an d a cou nter-of fer." 907 F.2d 155 4, 1565 (5th Cir. 1990 ). 11 In Weber Meadow-View Corp. v. Wilde, 575 P.2d 1053, 1055 (Utah 19 78), Weber Meadow-View Corporation held a right of first refusal in rea l property located in Summ it Cou nty, Utah. The property owner, Florence Wilde, received an offer to purchase the property for $200,000, which consisted of the conveyance of a particular home stated to be worth $48,000, and the balanc e paid in cash. Weber Meadow-View Corp., 575 P.2d at 1054. (contin ued...) 14 Many jurisdictions, on the other hand, do not require a preemp tioner to match immaterial terms f ound in a trigger ing off er. See, e.g., Prince v. Elm Inv. Co., 649 P.2d 820, 825 (Utah 1982) (quoting Brownies Creek Collieries, Inc. v. Asher Coal Mining Co., 417 S.W.2d 249, 252 (Ky. 1967) ("[I]f the holder of th e right of first re fusal cann ot meet ex actly the terms of the conditio ns of th e third p erson's o ffer, minor va riations wh ich obviou sly constitute no substantial departure should be allowed. And defeat of the right of refusal should not be allowed by use of special, peculiar terms or co nditions no t made in g ood faith . . . .") (emphasis added)); Coastal B ay Golf C lub, Inc. v. H olbein, 231 So.2d 854, 858 (Fla. Dist. Ct. App. 1970) ("One offer to purchas e matches another on ly if the essential terms of the offers are id entical.") (emp hasis adde d) (internal citatio ns omitted); Northwest Television Club, Inc. v. Gross Seattle, Inc., 634 P.2d 837, 840 (Wash. 1981) ("[A]n acceptance of an offer must always be identical w ith the terms of the offer, or there is no meeting of the minds and no contract. A purported acceptance that changed the terms of an offer in any material respect may operate as a coun teroffer . . . .") (emphasis added); Matson v. Emory, 676 P.2d 1029, 1031, 1033 (Wash. App. 1984) (holding that the exercise of a preemptive right 11 (...continued) When Weber M eadow -View a ttempted to e xercise its preemptive right, the corporation offered $200,000, which would in clude any piec e of real pro perty selected b y the seller, with a value of u p to $50,00 0. Id. In concluding that the corporation had not ex ercised eff ectively its right of first refusal, the Supreme Court of Utah determined that "the terms upon which the [property ow ner] wou ld sell her prop erty remains her exclusive prerogative so long as she acts in good faith . . . ," even though the inclusion of unique consideration made it impossible for the corporation to match exactly the terms of the triggering offe r. Weber Meadow-View Corp., 575 P.2d at 1055. 15 constitutes a counter-offer, not an acceptance, when the offer differs materially from the triggering offer) (em phasis add ed); John D. Stump & Assoc ., Inc. v. C unning ham M em'l Park, Inc., 419 S.E.2d 699, 705 (W. Va. 1992) ("[W]here the acceptance of a pre-emptive righthold er varies materially from the terms of the third party's offer, it is viewed as a rejection of the s eller's off er and te rminate s the op tion righ t.") (emp hasis ad ded). Existing Maryland law is not particularly instructive regarding the protocols for the proper exercise of a right of refusal, especially in light of the rather unique factual circumstances of this case.12 The Court of Special Appeals, however, quoting Coastal Bay 12 Maryland courts have had few opportunities to address whether a preemptioner has exercised effectively its right of first refusal when it omits or alters terms of the triggering offer. In Yorkridge Service Corp. v. Boring, the defendant-grantors had granted to the plaintiff-preemptioners a right of first refusal in the subject property, which option required the exercise to be "upon the same terms a nd con ditions c ontaine d in suc h [trigg ering o ffer]." 38 Md. App . 624, 625, 382 A .2d 343, 343 (197 8). The property owne rs received an offer to purchase the property for the sum of $224,000 and, shortly thereafter, gave notice to the preemptioners of the triggering off er. When the corpora te option ho lder attempte d to exercise its right of first refusal, it reduced the purchase price by the amount of the brokerage commission to be paid by the pro perty ow ner. Yorkridge Service Corp., 38 Md. App. at 62526, 382 A.2d at 34 4. The ration ale behind this reduction was that, by exercising its right of refusal, the sale was beyond the scope of the brok erage agre ement suc h that the pro perty owner would not be obligated to pay the bro kerage comm ission. Yorkridge Service Corp., 38 Md. App. at 626, 382 A.2d at 344. The C ourt of Special Appeals, relying on Katz v. Pratt Street Realty Co., 257 Md. 103, 262 A.2d 540 (1970), held that the preemptioner had not exercised validly its right of first refusal because the exercise did not contain the same terms as the triggering offer. Th e intermed iate appellate court did not determine, however, whether an exer cise of th e rightho lder's option m ust m atch exac tly, or rather match only the material terms of the trigge ring offer. B ecause the purchase price is an ess ential term of any land sale contract, see, e.g., Vary v. Parkwood Homes, Inc., 199 Md. 411, 417, 86 A.2d 727, 730 (1952), any modification of the price term necessarily would be a material alteration of the triggering offer. Thus, the result likely would have been the same under either the mirror (contin ued...) 16 Golf Club, Inc. and Matson, in its unreported opinion in the present case held that "[i]f the preemptioner wishes to exercise his rights, his offer must not v ary mate rially from the offer received by the landowner." (emphasis in original). Re ported M aryland cases, a t least in passing, have commented upon the contents of the purported exercise of a right of first refusal. In Ferrero Construction Co., for example, while outlining the factual background of the case, the Court stated that the preemptioner "submitted a contract that in its essential terms conformed to the third party's offer." 3 11 Md . at 563, 536 A.2d at 11 38 (emp hasis added). The primary dispute in Ferrero Construction Co., however, involved not the contents of the preemptioner's exercise of its right of first refusal, but rather whether the preemptive right violated the Rule Against Perpetuities. Thus, while Maryland requires generally the literal matching of terms in cases involving the formation of binding contracts, the cases focusing specifically on rights of first refusal are ambiguous at best in this regard. C. Good Faith Requ irement. We need not d ecide, in the posture of the present case, whether a holder of a right of first refusal m ust match litera lly all the terms in th e triggering o ffer in order to exe rcise its right because there is generated on this record a gen uine dispu te of materia l fact as to whether the Lanes and the Thoma ses (or one o f them) inse rted, in bad faith, the "no mining" 12 (...continued) image rule or materiality scrutiny. The present case does not present such a clear-cut situation. 17 clause as a "poison pill" in order to discourage or frustrate Bramble from exercising its right of first re fusal. In considering whether Petitioner exercised effectively its righ t of first refus al, there are several countervailing interests to be considered. On one hand, there is a significant interest in promoting the free alienability and marketability of land. A person or entity generally should have primary control over the disposition of property he, she, or it owns. West Texas Transmission, L.P., 907 F.2d at 1563 (holding that when a property owner receives an offer to purchase a piece of property encumbered by a preemptive right, "the owner of [the] property subject to a right of first refusal remains master of the conditions under which he will relinquish his interest . . . ."); Coastal Bay Golf Club, Inc., 231 So.2d at 858 ("One who owns property has a right to dispose of that property in any lawful w ay he chooses."); Matson, 676 P.2d at 1033 (h olding that in the context of a preemptive right, "the property owner should reta in primary con trol over disp osition of the property"); see also Selig v. State Highway Admin., 383 Md. 655, 8 61 A.2d 610 (200 4) (applying the Rule Against Perpetuities to a right of refusal, because such a right poses a restraint on the free alienation of property when improperly executed) (quoting Ferrero Constr. Co., 311 Md. at 573-74, 536 A .2d at 1142-43). On the other hand, we must consider the fact that Petitioner acquired, at the time RWL conveyed its preemptiv e right in the P roperty, an equ itable property interest in the Prop erty. Ayres v. Townsend, 324 Md. 666, 674-75, 598 A.2d 470, 474 (199 1) ("[A p reemptive right] 18 is an interest in property, and not merely a contractual right, whereby the preemptioner acquires an equitab le right in the property, which vests only when the property owner decides to sell."); Westpark, Inc., 225 Md. at 449-50, 171 A.2d at 743. When the Lanes gr anted initially the right of first refusal to RWL, the preemptive right was the product of a bargain ed-for excha nge vo luntarily en tered by th e Lane s. As su ch, one who enters into a contract must cooperate in good f aith to carry out the intention the parties had in min d when it was made; and that he should not be permitted to engage in any subterfuge or devious means to prevent the other party from performing, and then use tha t as an excu se for failing to keep his own comm itment. Weber Meadow-View Corp., 575 P.2d at 1055. With that in mind, eve n jurisdictions which re quire a pree mptioner to match ex actly the terms of a triggering offer (i.e., a lack of materiality of the omitted terms is no defense) recognize the following three exceptions to that rule: (1) th e property owner may waive exact matching, either through actions or express waiver; (2) proper names need not be matched because to hold otherwise would require the preemptioner to change its name in o rder to exercise the first option of purchase; and (3) the property owner, for the purpose of discouraging the holder of the preemptive right from exercising its right of first refusal, may not insert into the triggering offer terms which its knows will be repugnant to the holde r.13 13 The case s upo n wh ich w e rely i mpo se ex pres sly this dut y of good faith upon the property owner. We could find no cases wh ich require e xplicitly a third-party purc haser to exercise good faith in negotiating a triggering contract for the sale of the property. In some (contin ued...) 19 Miller, 87 F.3d a t 227-28. In other wo rds, the prop erty owner, an d possibly the th ird-party purchaser, must not be allowed to add in bad faith terms to the triggering of fer which are intended to nullify the right of first refusa l. West Texas Transmission, L.P., 907 F.2d at1563 (holding that "the owner of property subject to a right of first refusal remains master of the conditions under which h e will relinquish his interest, as long as those co nditions are comme rcially reasonable, imposed in good faith, and not specifically designed to defeat the preemptive rights.") (citations omitted); Weber Meadow-View Corp., 575 P.2d at 1055 (Utah 1978) ("[T]he decision as to . . . the terms of upon w hich the op tioner wo uld sell her prope rty remains her exclusive prerogative so long as she acts in good faith and without any ulterior purpose to defeat the righ t of the optionee."). 14 Even the cases up on whic h Respo ndents rely imp ose a duty of g ood faith in forming a triggering offer. Respondents rely specifically on Oregon RSA N o. 6, Inc. v. Ca stle Rock 13 (...continued) cases, there have been arguments made that the third-party, for its own conduct in this regard, should be liable for intentional interference with the preem ptioner 's right of first refu sal. See, e.g, Prince v. Elm Inv. Co., 649 P .2d 820 , 821 (U tah 198 2). 14 Jurisdictions which consider the materiality of omitted or altered terms analyze also the motive behind insertion of specific contract provisions into the trigg ering o ffer. See Brownies Creek Collieries, Inc. v. Asher, 417 S.W.2d 249, 252 (1967) ("[D]efeat of the right of first refusal should not be allowed by use of special, peculiar terms or conditions not made in good faith ."); Matson, 676 P.2d at 1031 ("The right [of first refusal] is a valuable contract right which should not be rendered illusory by imposing requireme nts that are im possible to meet."); Coastal B ay Golf C lub, Inc. v. H olbein, 231 So.2d 854, 857 (Fla. Dist. Ct. App. 1970) ("A right of first refusal is a right to elect to take specified property at the same price and on the same terms and conditions as those continued in good faith offer by a third person . . . .") (emphasis added). 20 Cellular of Oregon L.P., 76 F.3d 1003, 1007 (9th Cir. 1996) for the proposition that "[u]nder Oregon law, an acceptance of an offer must be 'positive, unconditional, unequivocal, and unam biguou s'." The U.S. Court of Appeals for the Ninth Circuit indeed interpreted Oregon law to require a d efinite respo nse in order effe ctively to form a c ontract. The Ninth C ircuit, however, concluded ultimately that "there is an implied covenant of good faith and f air dealing" in every contract formed under Oregon law, and that the grantor of the preemptive right had violated this covenant through its actions. Specifically, the court held that "[t]o permit the transfer of a shell company as a way around the first refusal provisions was 'an artifice intended to thwart plaintiff's legitimate contractual expectation.'" Thus, even in states which require positive, unconditional, and unequivocal acceptance, there is an implied covenant that a party will act in good faith not to defeat improperly a bargained-for preemptiv e right. Fina lly, and most importantly, our case law supports the imposition o f an implied duty on the part of the property owner and third-party purchaser to act in goo d faith. In Straley v. Osborne, we addressed whether a lessee, who held a first option to purchase leased land, was able to set aside the sale of th e premises to a third-party after the lessee failed to make any attempt to exercise its right. The property owner sold to Straley a junkyard business, and on the same day, leased to Straley the premises upon which the business was located. Straley, 262 Md. at 515, 278 A.2d at 65. The junkyard was located on approximately seven 21 acres of a ten-acre tract owned by the property owner. 15 Included in the lease agreement was a "first option of purchase" whereby Straley would have the first option of buying the property should the property ow ner decide to sell. Straley, 262 Md. at 516, 278 A.2d at 66. After some time, the property owner's used car business began to fail, and he listed for s ale the entire ten-acre tract in order to raise money. Osborne, a third-party purchaser, made an offer to buy the entire ten-acre piece of land. T he own er's real estate agent contacted Straley soon thereafter, inf orming the preemptio ner that he n ow had the oppor tunity to exercise h is right of first re fusal. Straley, 262 Md. at 517-18, 278 A.2d at 66 -67. Straley failed to exercise timely his preem ptive right, 16 but subsequently brought suit in order to set aside the sale of the property to Osborne. Even though we ultima tely concluded that Straley had f ailed to exerc ise effective ly his right of first refu sal, we reasoned tha t "the [prop erty owner-les sor] canno t act in derogation of the [holder-lessee's] 'first option' rights in the leased premises." Straley, 262 Md. at 524, 278 A.2d at 70. Specifically, the Court considered carefully the circumstances of the case in order to ensure that the lessor would not be able to "re nder the lesse e's bargained for 'first option' a nullity by merely including it in a larger tract being offered for 15 The property owner maintained other business interests, including a used-car dealership, Cadilla c Jack E nterpris es, Inc., which was located on the other three acres of the ten-acr e lot. Straley v. Osborne, 262 M d. 514, 516, 278 A .2d 64, 66 (1971). 16 Straley was alle gedly informed of the proposed sale several times. Each time, he refused to exercise the option, claiming that the purchase price was to o high. See gene rally Straley, 262 Md. at 517-21, 278 A.2d at 66-68. 22 sale." Despite the preemptive rightholder's equitable interest in the property, his inaction after being notified of the sale rendere d ineffec tive his after-th e-fact attem pt to exercise the first option of purchase. We believe that imposing upon the property owner and third-party purchaser an implied duty of goo d faith and fair dealing s trikes the prop er balance . A good faith requirement preserves a property ow ner's right to disp ose of pro perty as he, she, o r it deems appropriate, thus maintaining marketability of the pro perty. This approach protects, at the same time, the equitable property interest that the preemptioner holds in the encumbered prop erty. Imposing this duty of good faith on the parties comports additionally with the laws of offer a nd acc eptanc e follow ed gen erally in M aryland. Port East Transfer, In c. v. Liberty Mut. Ins. Co., 330 Md. 376, 385, 624 A.2d 520, 524 (1993) ("Even when the parties are silent on the issue, the law will impose an implied promise o f good f aith."); Am. Trading & Prod. Corp. v. United States, 172 F. Supp. 165, 167 (D. Md. 1959) ("[T]here is 'an implied provision of eve ry contrac t . . . that neither party to the contract will do anything to prevent performance thereof by the oth er party . . . .") (applying Maryland law) (quoting George A. Fuller Co. v. United States, 69 F. Supp. 409, 411 (Ct. Cl. 1947)). We conclude, therefore, that the "'terms upon which the [property owner] would sell her property remains her prerogative so long as she acts in good faith.'" Matson, 676 P.2d at 1032 (quoting Weber Meadow-View Corp., 575 P.2d at 1055 ("[T]he decisio n as to . . . the terms upon which the 23 [owner] would sell her property remains her exclusive prerogative so long as she acts in good faith and without any ulterior purp ose to defeat the right of the [ preemptioner].")). C. Application Good faith ordinarily is a question of fact for summary judgment purpo ses. Rite Aid Corp. v. Hagley, 374 Md. 665, 684, 824 A.2d 107, 119 (2003). As such, "questions involving determinations of good faith which involve intent and motive 'ordinarily' are not resolvable on a motion for summary judgment." Rite Aid Corp., 374 Md. at 684, 824 A.2d at 119; Gross v. Sussex, Inc., 332 Md. 247, 256, 630 A.2d 1156, 11 60 (1993 ) ("[S]um mary judgm ent is inappropriate when intent and motive are critical to the proof of a case.") (citing Poller v. Colum bia Broad. Sys., Inc., 368 U .S. 464, 4 73, 82 S. Ct. 486, 491, 7 L. Ed. 2d 458, 464 (1962)); Goldstein v. Miles, 159 Md. App. 403, 446-47, 859 A.2d 313, 338 (2004). Even cases involving good faith, m otive, or intent m ay be resolved on summ ary judgmen t, however, if there are no m aterial dis putes a s to the f acts of t he case . Rite Aid Corp., 374 Md. at 685, 824 A.2d at 119 (quoting Gross, 332 Md. at 257 , 630 A.2d at 116 1). Based on the record here, we conclude that summary judgment was an improper means of determ ining the righ ts of the parties . While the "no mining" clause could have been inserted in the Thomas Offer for some legitimate reason, there is evidence in the record, if believed, that the Lanes and/or the Thomases inserted the prohibition on mining as a "poison pill" in order to d iscourage B ramble fro m exercisin g its right of firs t refusal. It was welldocumented at all court leve ls that Bram ble was m ining, for san d and gra vel, land adjacent 24 to the Prop erty since at least 7 May 19 93. Thus, at the time the triggering offer was made, it could have been apparent to both the Lanes and the Thomases17 that Petitioner intended to use the Property for the purposes of mining . A "no mining" clause would defeat that purpose of Petitioner's desire to own the Property, thereby frustrating Petitioner's bargained-for equitable interest in the P roperty. Respo ndents argue, and the intermed iate appellate court agreed, that the inclusion of the use restriction in a hand-written addendum, for the purposes of analyzing the materiality of the omitted term, indicates the importance of the prov ision to the sellers. The manner in which the provision was added, i.e., by a hand-written addendum attached to the contract of sale, may support an inference that the "no mining" clause was an after-the-fact method of frustrating Bramble's preemptive right by including a term or condition w hich the pa rties knew Petitioner w ould not ac cept. 18 We agree with Respondents that the Lanes were free to structure the sale of their property in any way they saw fit; however, the Lane s and the T homase s were ob liged to 17 As indicated on the Addendum, Mrs. Thomas was a licensed real estate agent in the area. Thus, an inference could be drawn reasonably that she was aw are of the uses to which neig hboring land own ers p ut pa rcels of la nd adjac ent to the P rope rty. 18 At oral argument, disparate views were advanced as to who added the "no mining" provision to the Thomas Offer. Counsel for Petitioner claimed that the prohibition was added by the Thomases. Counsel's premise was that the Respondents, by virtue of Mrs. Thomas being a real estate agent in the area, knew of neighboring uses, and that the Thoma ses insisted on the clause to frustrate Bra mble's right of first refusal. Counsel for the Lanes, on the other hand, argued that because the provision was added in the addendum, the mining restr ictio n wa s materia l to th e sellers. In other w ords , cou nsel's argument could be understood to mean that the Lanes insisted on the "no mining" provision. 25 comport with notion s of good faith and f air dealing w ith regard to Bramble's preemptive right in setting the terms of the sale. If an aggrieved holder of a right of first refusal satisfies a court that the property owner's and/or third-party's actions are arbitrary or pe rformed in bad faith, the owner of the property encumbered by the preemptive right must articulate a "reasonab le justification" for its ac tions. Prince, 649 P.2d at 825. Whether a specific term or conditio n is comm ercia lly reasonable, i.e., inserted in good faith, is a case-by-case determination, and must be resolved by examining the circumstances peculiar to the case. Id. Thus, if Bramble is able to establish that the Lanes and/or the Thomases inserted, in bad faith, into the triggering offer the "no mining" provision in order to defeat the purpose of Bramble's desire to own the Property, the burden will shift. It will then be incumbent upon the Lanes and/or the Thomases to articulate a reasonable justification for imposing such a use restriction upon the Prope rty. If they are unab le to produce an adequate justification for the "no mining" c lause, Bram ble should be permitted to exercise its preemptive right without satisfying literally the a dded te rm of th e trigger ing off er. JUDGMENT OF THE COURT OF SPECIAL APPEALS REVERSED. CASE REMANDED TO THAT COURT WITH DIRECTIONS TO REVERSE THE JUDGMENT OF THE C I R CUIT COUR T FOR C AROL IN E COUNTY AND TO REMA ND THE CA SE TO THE CIRCUIT COURT FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION. COSTS IN THIS COURT AND THE COURT OF SPECIAL APPEALS TO BE PAID BY THE RE SPONDENTS. 26

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